Car Loan Rates 2026: Used APRs Near 11% as New Prices Top $50K

The short version

Auto loan rates have come down a little this year. Cars have not gotten cheaper. Experian's latest quarterly finance data puts the average APR at 6.35% for new vehicles and 11.19% for used ones in the second quarter of 2026.42 Both figures are slightly below the first quarter's 6.39% and 11.43%.46 Over the same period, the average new vehicle sold for $50,562 in September. That was $52 short of the record set in December 2025.23 Factory incentives also shrank compared with a year ago.30 The $7,500 federal EV credit expired more than a year ago.11

For shoppers, the main point is that the loan rate depends mostly on the borrower, not on market conditions. The gap between the best and worst credit tiers is now much bigger than the gain from waiting for rates to fall.

Where rates actually stand, and why the numbers disagree

The published averages are scattered, and the spread itself tells you something. Experian's 6.35% new and 11.19% used figures come from loans that were actually funded.44 Edmunds put August's averages at roughly 7% for new and 10.6% for used. Cox Automotive's snapshot reported much higher rates of 10.17% and 14.43%.42 Bankrate's weekly survey of advertised rates had a 60-month new-car loan at 7.06% and a 48-month used-car loan at 7.47% as of late October.41 A tracker of more than 8,500 banks and credit unions showed new-car loans near 6% and used-car loans near 6.7%.4549

These figures mostly don't contradict each other. They measure different things. Advertised rates from banks and credit unions assume a strong applicant. Averages of funded loans include every borrower who signed, at every credit level. The useful takeaway is that a good borrower who shops at credit unions can beat the national averages by a wide margin. Advertised rates on short terms run from about 2% to 4% at some institutions.49 PenFed lists new-car rates starting at 3.39% when buyers use its TrueCar-powered buying service.43

Rates have eased only slightly over the past year. One analysis traces the trend to three Federal Reserve cuts in late 2025, with the prime rate holding at 6.75% since December.47 Bankrate's weekly figures moved by just a few hundredths of a point between late summer and late October.41 Shoppers waiting for a big drop in rates have little reason to expect one soon.

Credit score is the biggest factor

The tier-by-tier data shows why the advice centers on credit. In Experian's second-quarter breakdown, super-prime borrowers paid an average of 4.41% on new cars and 6.29% on used. Subprime borrowers paid 13.52% and 19.10%. Deep-subprime borrowers paid 16.11% and 21.62%.42 One worked example of a $20,000, 60-month used-car loan shows the cost. The prime average comes to about $413 a month and roughly $4,800 in interest. The near-prime rate costs about $465 a month and nearly $7,900 in interest, a difference of more than $3,000 for the same amount borrowed.50

Term length matters too. The average new-car loan now runs about 69 months, with an average payment of $765. The average used-car loan runs about 68 months, with a payment of $542.44 Longer terms keep payments lower but leave borrowers exposed to negative equity. Edmunds data found that 29.6% of trade-ins toward new vehicles in the second quarter were underwater, by an average of $6,884. Rolling that debt into a new loan pushed average payments to $944 a month.25

For buyers, the order of steps is simple. Improve your credit before you shop. Get preapproved by a credit union or bank so you have a benchmark rate. Keep the term as short as the budget allows. And check what's owed on any trade-in before negotiating.

New cars: near-record prices and fewer incentives, with exceptions

Kelley Blue Book reports that new-vehicle prices rose for a fourth straight month in September.23 The year-over-year increase was a mild 0.7%.23 That's mostly because buyers are moving to cheaper models, not because individual models cost less. Cox Automotive's Erin Keating said affordability pressure is pushing shoppers into lower-priced segments, which holds down the overall average even as prices of specific vehicles rise.21 Compact car prices rose 3.2% from a year earlier to $27,977. Full-size pickups averaged $67,573.27 KBB said Americans are under pressure from inflation across the economy that it attributes to the war.30

Incentives cut into the price less than they used to. Discounts averaged 6.6% of the transaction price in September, or $3,359, down from 7.3% a year earlier.30 Jalopnik, citing Cox, put the year-earlier figure at about $3,680.29 Tariffs add to the pressure: imports from Japan, South Korea and the EU face an all-in rate of 15%.25 One buying guide estimated the added cost at roughly $1,600 to $2,000 per domestically assembled vehicle, with automakers so far absorbing much of it.25

The reporting differs on one point. KBB describes automakers as holding back incentive spending.21 Dealer-software firm vAuto describes third-quarter incentives as up and market supply as rising from 75 to 82 days.26 Both can be true. Overall incentives are lower than last year, while discounts are growing on slow-moving and outgoing inventory. Jalopnik found the gap clearly on 2026 models being replaced. Kia is offering $10,000 in cash on the final-year Niro EV. Volkswagen has $6,000 on the ID.4. Chevrolet has up to $6,500 on outgoing Silverado 1500 trims.29 Year-end shoppers should look for these model-specific deals rather than relying on the average.28

Zero- and low-APR promotions tied to these deals also beat almost any rate a bank will offer. That's another reason to arrive with a preapproval. It lets you compare a promotional rate against a cash rebate.

Used cars: prices have eased slightly but remain high

Used-car coverage is the most mixed. KBB says used prices are back near their pandemic-era highs.22 iSeeCars found that the average three-year-old used car lists for $32,461, nearly $10,000 more than in 2019.5 Carfax reported that average used SUV prices topped $25,000 for the first time in its index. Used vans and minivans passed $24,000 for the first time.1

Short-term listing data points the other way. One dealer-inventory index shows average asking prices down 1.7% from a month earlier, to $28,840.3 Carfax says used hybrids and EVs are getting cheaper. Vehicles coming off 2023 leases have created more supply than buyers want, and average asking prices for those models fell more than $230 in October.1

Overall, used vehicles are still expensive, but prices have softened at the margins, especially for electrified models. The financing makes it harder. A used-car buyer with prime credit still pays about 2.7 points more than the same buyer on a new car (8.81% versus 6.15%).50 Strong buyers should compare a discounted outgoing new model with promotional financing against a lightly used vehicle financed at used-car rates. The new car can come out cheaper.

EVs: the federal credit is gone, and buyers have new math

The federal clean-vehicle credits are gone. That includes up to $7,500 for new EVs, $4,000 for used EVs, and the commercial credit behind the leasing workaround. All three ended for vehicles acquired after September 30, 2025.1317 The home-charger credit ended for equipment placed in service after June 30, 2026.14

The market has adjusted but held up. Cox data shows EV sales fell nearly 24% in the first half of 2026 compared with a year earlier. Sales recovered more than 14% from the first to the second quarter as higher gas prices pushed buyers toward efficient vehicles.20 Edmunds puts EVs at a steady 5% to 6% of new sales this year.11 EV prices are falling. The average EV sold for $55,879 in September, down 3% from a year earlier. EV incentives fell to 11% of the transaction price, the lowest level this year.23 EVs have cost about 11% more than gas models so far in 2026, down from nearly 18% in 2025.30

What replaced the credit is a federal deduction of up to $10,000 a year in auto loan interest. It applies to loans on new vehicles with final assembly in the U.S., runs through 2028, and does not cover leases.1218 One estimate puts its value at roughly $2,200 to $3,700 in tax savings, much less than the old credit.18 The deduction only helps borrowers, so it makes the loan rate more relevant to the buying decision. California has also added a rebate program for first-time EV buyers.20

Insurance: stable for now, but still expensive

Insurance belongs in the monthly budget, and it has stopped climbing quickly. Insurify found full-coverage premiums fell 6% in 2025. They rose about 1% in the first half of 2026 to $2,237, with increases expected in 32 states by year's end.39 Another analysis also describes 2026 as roughly flat, with increases of 1% to 3%.38 Over a longer period, NerdWallet reports that the median premium rose 32.3% from January 2023 to January 2026. That is more than twice as fast as income growth over the same period.36

The model you choose matters. ValuePenguin estimates about $214 a month to insure a Toyota RAV4 or Honda CR-V, compared with $354 for a Tesla Model Y.37 Shopping around also matters. In some states, the highest quote ValuePenguin found was more than twice the lowest.37 Credit matters here as well: The Zebra's data shows drivers with poor credit paying more than twice what excellent-credit drivers pay for six months of coverage.33

Bottom line

The overall market is unlikely to bring the savings shoppers want in 2026. Rates are moving only slightly, new-car prices are near a record, and the federal EV subsidy is gone. The buyer's own position matters more. That means credit score, credit-union preapproval, loan term, trade-in equity and insurance quotes, plus timing a purchase around year-end clearance deals on outgoing models. Experian's tier data shows that improving your credit from near-prime to prime can save thousands of dollars. Waiting for the market to drop rates by a fraction of a point saves far less.